So that’s part number one. And then part number two, not asking about future price increases, but given what you’ve described and history of implementing price increases, is it fair to say that the January 1 price increase is now — and again, I know it’s RISI and what they do, but commercially speaking, if you deemed it appropriate going-forward that you would have to nominate something new. Thank you.
Tom Hassfurther: Gabe, this is Tom. That’s a great question you have, especially relative to the decoupling from RISI. As I indicated in our last call, this would not be an easy task and it’s going to take some time. But we’re still pressing forward with that, driven again by our customers’ frustration over what is going on and what gets reported these days. If you just work through at least from PCA’s perspective, if you look through the — walk through the math and you said, well, liner came down $110 after its peak and medium a little bit more, we would need to have a significant recovery to get back to those kind of levels. And as I also indicated, inflation continues to take place. So there’s a — even customers have said to us that if things had just remained the same from the peak, they would have — they’d almost prefer that just because they just don’t like these roller-coaster rides, and they’re trying to get off of that down and then up and then down and then up, and these sorts of things.
So — and over a long period of time, we could have managed that in a much smoother fashion. So these are the kind of discussions we’re having with our customers. Our customers are very open to alternatives and different methods. But you got to remember, a lot of these contracts are long-term contracts. They have different trigger points, they have different times when we’re negotiating them. And so we are where we are at this point in time. And the other thing that we talked about was that when we announced this increase, the increase was on containerboard. And it wasn’t — the announcement wasn’t on boxes. That’s between us and our customers, but we announced it on the open-market of containerboard, and we implemented it. It didn’t get reported quite that same way, but that’s part of our frustration.
I think that relative to future pricing, we don’t — we don’t really discuss future pricing and we don’t make any indication of what we’re going to do in the future, but you could probably — you probably read through where we are and some of the inflationary pressures that are taking place. And the last reminder is that it’s — there — all increases aren’t strictly on supply and demand. Sometimes they have to do just costs. And costs in general and some costs that we’re trying to minimize as much as we possibly can, but in lots of cases, we can’t. So hopefully that gives you the — hopefully that gives you a good indication of where we are.
Gabe Hajde: No, crystal clear. Thank you, Tom. Maybe just, I don’t know, Bob, if you can quantify, I think kind of standard repricing for rail occurs in and around April 1. You called it out, I think roughly two-thirds or so of your parent rolls gets shipped around rail and then the majority of converted product is mostly trucked. So just maybe can you frame up maybe what the increases were or what portion of your transport spend is rail specifically?
Tom Hassfurther: I think in total spendm Gabe, it’s like 65% or so is rail, I believe.
Gabe Hajde: Okay. And one last one, very subjective, but given the fact that your two largest competitors right now are pursuing transatlantic combinations, do you see any opportunity, Mark, either organically or potentially if there’s a required divestiture to pick up business along the way? Again, appreciating it. I know it’s a sensitive topic. Thank you.
Mark Kowlzan: Yeah, I don’t have any comment regarding that. That’s at some place it’s — I won’t go. But as you can imagine, we take advantage of opportunities as they come along.
Gabe Hajde: Thank you.
Mark Kowlzan: Next question, please.
Operator: Our next question comes from Anthony Pettinari from Citi. Please go ahead with your question.
Anthony Pettinari: Hi, good morning.
Mark Kowlzan: Good morning.
Anthony Pettinari: On the last call, you talked about expectations for I think $0.35 sequential headwind in 1Q on seasonal costs that I think were mostly labor and benefits related, and maybe being able to get 60% of that coming back in 2Q. If I got that right, I’m just wondering how given where you shook out in 1Q and the 2Q guidance, how that kind of played out versus expectations?
Mark Kowlzan: Yeah, Anthony, I think it played — we did a little bit better, I think on what the impact was in 1Q. But in our 2Q guidance, what I indicated, I think like you said, I think it was 60% of those seasonal or one-time items on the wage side of cost. We are seeing those in our guidance for the second quarter.
Anthony Pettinari: Got it. Got it. And then just following up on Gabe’s earlier question on pricing mechanisms, a lot of packagers have contracts where they get kind of an automatic pass-through on their primary raw material, whether that’s aluminum or polyethylene. I’m just wondering kind of conceptually, big picture, would it be possible to structure contracts where fiber is just passed through automatically, whether that’s OCC or virgin fiber or is there something about craft line or test line or boxes where maybe there’s too many SKUs or there’s too many customers or it’s just it makes that kind of automatic pass-through more difficult.
Tom Hassfurther: I think it’s a…
Mark Kowlzan: Yeah, Tom, go ahead…
